Monday, March 1, 2010

How Much Do You Pay for Health Care?

If you have health care insurance, you probably know how much you pay annually for those premiums. And, you can tally up what you have to pay providers in addition to those costs ... for things such as out-of-pocket expenses, co-pays, etc. You probably think that's what it costs you for your health care, but you're wrong.

Because the bulk of health care policies are subsidized by employers, costs associated with health care are bundled into absolutely EVERYTHING we buy! Until we bite the bullet and rethink how we fund and pay for our individual health care costs, they will exponentially escalate even further.

Everything we purchase has embedded health care costs as a component of its cost: the car you just purchased and the gasoline it takes to drive it off the lot or the oil it takes to lubricate its parts; the electricity to light your home or the natural gas it takes to heat it; the toothbrush, cereal, milk and laundry products you just purchased at the grocery; the hamburger and fries you just bought at your favorite fast-food restaurant, etc. Even though some folks may not pay premiums for their own personnal health care, they're subsidizing the health care costs of millions of other Americans through the embedded components of health care costs in the prices of goods and services we pay for each and every day.

You may say, "What?" But think about it. The manufacturer, who makes a product, embeds the subsidized cost of medical insurance into the cost of each product they make. You might then argue that not all manufacturers or service providers provide their employees with health insurance. Ahh, but, you forget about the distribution chain. What about the oil refineries, the trucking industry, the paper and packaging industry, the advertising industry? I could go on, ad nauseum. It permeates everything! Even those who don't provide health care benefits pay for the benefits of others via the materials and services they buy to enable production of their products and services.

Much ado had been made of the proposed health care legislation now being considered in Congress, both pro and con. Regardless of whether it passes or fails a vote in Congress, it will fail in its attempt to quell the rapid rise of health care costs. Why ... because it perpetuates the problem and fails to recognize and remedy the real problem driving up not just the cost of health care, but everything! Until Congress addresses the real problem, and not just various symptoms of the problem, the vicious cycle we find ourselves in will only continue.

Health care coverage and costs need to be 'unbundled' from the costs of good and services. The only way to do that is through the use of single-payer plans or exchanges that are not part of employment compensation/benefits packages. You may think that what I'm saying is heresy on first glance, but again, consider the ever-increasing embedded costs for goods and services. If we fail to consider the embedded costs on goods and services imposed by using employees for our health insurance delivery system, nothing has changed.

I don't believe that government should be the entity that actually provides the administration of health care insurance plans. Instead, I believe that administration should be provided by multiple non-profits who provide those services thoughout large demographically diverse regions. Government's role would be only to regulate the equity and fairness, and set minimum standards to be utilized by those non-profit profiders. Some of the provisions in the currently proposed legislation fall into those regulatory categories I'm talking about (e.g., no caps, no pre-existing conditions, no expulsions when you do get sick, etc.). And, part of the role of the 10-year census-taking could then be to adjust regional boundaries to assure that demographical diverseness.

Health care costs have been rising at double-digit rates. Recently, the LA Times reported that Wellpoint's Anthem Blue-Cross plans to raise premiums by 39%. Other insurance companies are announcing similary agregious double-digit increases. For employers who are able, they'll pass along those cost-increases through embedded charges in their products and services. For those who aren't, they'll either go under, reduce the number of employees on their payrolls, or just stop offering health care benefits altogether. If we allow the current process to continue, it just becomes an ever-escalating death spiral (pun intended).

People may have voted for change when they elected Barrack Obama to the White House, but when push comes to shove, just exactly how much change are they really willing to fight for? That remains to be seen.

3 comments:

Anonymous said...

You are on target with this article. How many have calulated the cost of not getting health care prices under control?? Obviously we don't want to think.

Patrick said...

Health care needs to be a part of a lager "reform". We tax cigarettes and tobacco, why not high fructose corn syrup.

A good friend of mine graduated from the University of California Santa Barbara with honors but couldn't find a seat in medical school. It's an interesting story how he came to be offered a education in France, and now practices dentistry in Santa Barbara.

We need to provide more and better training for doctors as well as medical technicians. In fact our failing education system is at the root of many of our greatest social ills.

If we are to believe the Myans we are entering a time of great social change. If we look around and see our jobs being absorbed by automation, and our ability to communicate going through changes that were recently unheard of, we might come to the same conclusion.

Unfortunately our education system is not adequite to cary us into the new century

Anonymous said...

Don't know if it is still the same but 20 years ago when my son wanted to get into Medical School he had to be sponsored by an MD thus controlling the number of Doctors in this country.

Who's controlling our Health Care Costs?